You can't blame investors for feeling a bit hesitant regarding deploying new money in the U.S. stock market these days: lingering concern about Italy's finances and related European debt concerns, along with below-trend U.S. GDP growth has created an uncertain U.S./Europe economic outlook. Where's the Dow likely to head in the next six months?

Each side -- the bulls and the bulls - is trying to make an overwhelming case that the data support their view of the world: the current demarcation line is Dow 12,000 with another key battle line being the 10,700 to 10,800 levels below it.

True, with a Dow trading at/near 12,160, we're a long way from Dow 10,800 but given current market and economic conditions, that can translate into just two or three days of trading.

The market's bulls argue that the U.S. economy's 2.0 percent growth rate in the third quarter -- while not stellar -- nevertheless shows an economy that continues to expand despite the danger/threat posed by Europe's debt crisis. The bulls also point to falling jobless claims, an average of more than 100,000 new jobs created during the past three months, an expanding industrial sector, decent corporate profits, rising auto sales, and rising consumer sentiment and the belief that holds that private sector lay-offs most likely have peeked, to argue that the Dow is poised to head higher in the six months ahead.

Conversely, the market's bears argue the substantially smaller U.S. workforce, stagnant incomes in many job classifications, an economy that's short - - at minimum -- about 13 million full-time jobs, lingering above-average home mortgage foreclosures, and that ongoing consternation known as the Europe government debt crisis (or sovereign debt crisis) -- means the Dow is sending a false signal, and is likely to drop substantially this autumn.

Let's do a condensed, cross-methodology analysis to see if we can arrive at an informed investment decision / conclusion regarding where the Dow is headed, near-term.

Technical Indicators: Slightly Bullish. The Dow is above the 50-day (11,596) and 200-day (11,946) moving averages -- which is bullish. Further, the Dow has been in an uptrend since last week, and held key, technical support at/near 10,700/10,800 during late summer/early fall. Also, five probes of 10,700 failed to push through support at that level. However, the Dow's MACD Histogram is weak.

Fundamental Indicators: Slightly Bullish. The third quarter earnings season turned out to be roughly in-line with expectations. Further, the U.S. economy, as measured by GDP, is growing at a modest but not strong rate, and the U.S. Federal Reserve's latest Beige Book regional economic summary indicated that all regions except St. Louis reported a decline in economic activity. Initial jobless claims are right at the psychologically significant 400,000 level. However, the manufacturing sector continues to expand, and auto sales are rising at better-than-adequate pace. Also, as noted, the economy has created about 130,000 new jobs per month during the last three months, and there's reason to believe the U.S. Department of Labor's payroll survey is underestimating job growth: the household survey indicated a 498,000 increase in employment in November, and the household survey tends to capture reversals in the job market sooner than the payroll survey. On the downside, the U.S. unemployment rate, while it dropped to 8.6 percent in November, is still too high, and half the unemployment rate reduction in November was due to people stopping their search for work, and hence weren't counted as unemployed.

Monetary Policy: Bullish. The U.S. Federal Reserve, in conjunction with the world's other, major central banks, including the European Central Bank, Bank of England, and the Bank of Japan, undertook efforts to make more dollars available to European banks, and also announced related currency swap arrangements in order meet demand for dollars in Europe and to prevent a liquidity crisis similar to that which occurred following the collapse of Lehman Brothers in 2008. The world's central banks are committed to preventing another freeze-up of global credit markets. That said, credit markets, while more-liquid than a year ago, still have not normalized.

Fiscal Policy: Bearish. The U.S. Congress, led by Tea Party-pressured Republican majority in the U.S. House, won the debt deal debate, and still has the upper hand in the legislative branch. Hence, Congress will implement austerity measures too soon. Deficit reduction and weeding-out needless programs are laudable goals, but reducing the deficit too fast -- especially if spending cuts affect the social safety net -- reduces demand, and could very well increase social problems -- leading to even higher social costs down the road. Further, Senate Republicans and Senate Democrats are at odds regarding how to extend the payroll tax deduction: Republicans want spending reduction offsets -- and any failure to extend the cut would take more demand out of the economy.

Credit Markets: Recovering, but still strained, with still too many small/medium-sized businesses arguing they're not getting the level of credit they need to expand operations. Home mortgage qualifications terms remain very high. Home mortgage rates, however, are at/near 50-year lows, averaging about 4.00 percent for home buyers with excellent credit.

Meanwhile, Europe's sovereign debt situation remains clouded, and there could be more financial market ripples from Italy. The appointment of Mario Monti as prime minister is a major step forward -- he's expected to propose $40 billion in austerity measures this week -- but it still has to pass the Italian Parliament. Bottom Line: the risk of another credit crunch exists until Italy's fiscal condition is stabilized.

Conclusion: The view from here argues that the outlook for U.S. stocks and the U.S. stock market is Neutral for at least the next three months -- through early March. The bias is to hold off considering new stocks or adding to current stock positions, at least until mid/late January.

Given the above technical and fundamental indicators, and the volatility associated with end of the year window dressing -- decisions by institutional investors to buy high-performing stocks and exit under-performing ones -- pull-backs in the Dow and S&P 500 are likely to occur. Underscoring, the current stock market is highly selective, and the bias is toward only deploying capital in those clear-winner stocks.

In sum, the market needs additional, bullish U.S. economic data to support the Dow. What would really perk up the attitude of investors? Continued increases in U.S. monthly job creation to more than 200,000 new jobs per month.